i%ilyers, - The Supreme Court of...
Transcript of i%ilyers, - The Supreme Court of...
I N THE SUPREME COURT O F JUDICATURE O F JAMAICA
I N COMMON LAW
S U I T NO. C . L . R 1 1 2 / 9 8
BETWEEN S H E I L A ROSE-GREEN P L A I N T I F F
A N D PATRICK ROSE-GREEN I S T DEFENDANT
A N D \ BANK O F NOVA S C O T I A JAMAICA L I M I T E D
2ND DEFENDANT
X r . J o h n G r a h a m and K r . C h r i s t o p h e r N z l c o l m f o r t h e p l a i n t i f f i n s t r u c t e d by K e s s r s . P a t t e r s o n , P h i l l i p s o n & G r a h a m , A t t o r n e y s - a t - - l a w .
M r s . Sandra X i n o t t - P h i l l i p s f o r t h e 2 n d d e f e n d a n t , i n s t r u c t e d by ~ e s s r ? i%ilyers, F le tcher & G o r d o n , A t t o r n e y s - a t - l a w .
F i r s t d e f e n d a n t n o t a p p e a r i n g and n o t r ep resen ted .
H e a r d : A p r i l 9 , 1 6 , June 1 7 , 1999 & 7 t h A p r i l , 2000
RECKORD, J
T h e w r i t of s u m m o n s i n this a c t i o n w a s f i l e d by t h e
p l a i n t i f f on t h e 1 5 t h of S e p t e m b e r , 1 9 9 8 . T h e s t a t e m e n t of
c l a i m da t ed 3rd D e c e i n b e r , 1 9 9 8 w a s s u b s e q u e n t l y f i l e d and l a t - r
a m e n d e d .
T h e a m e n d e d s t a t e m e n t of c l a i m f i l e d on t h e 1 3 t h of
A p r i l , 1 9 9 9 , readsas f o l l o w s -:
1. The p l a i n t i f f i s and was a t a l l m a t e r i a l
t i m e s t h e w i f e o f t h e f i r s t d e f e n d a n t .
2 . A t a11 materia .1 t i m e s , t h e f i r s t d e f e n d a n t
was a cus tomer of t h e second d e f e n d a n t and
i n d e b t e d t o them f o r sums s e c u r e d by
mor tgages o v e r proper , ty l o c a t e d a t l o t
45 U n i t y H a l l , Montego Bay i n t h e p a r i s h
o f S a i n t James and r e g i s t e r e d a t . r -
Volume 1183 F o l i o 480, owned j o i n t l y
by t h e p l a i n t i f f and t h e f i r s t d e f e n d a n t .
3. On o r a b o u t t h e 1 4 t h day of O c t o b e r , 1994
t h e f i r s t d e f e n d m t wrongfu l ly p r o c u r e d
and induced t h e p l a i n t i f f t o s i g n and
e x e c u t e an i n s t r u m e n t o f Guarantee by
which s h e g u a r a n t e e d t h e f i r s t d e f e n d a n t ' s
i n d e b t e d n e s s . t o t h e second d e f e n d a n t f o r
u n l i m i t e d sums.
4 . F u r t h e r , t h e f i r s t d e f e n d a n t w r o n g f u l l y
p r o c u r e d and unduly i n f l u e n c e d t h e
p l a i n t i f f t o s i g n and e x e c u t e Kor tgage
Deeds now r e g i s t e r e d a s numbers 656976,
739002, 976508, 836428, and 910231 on
t h e d a t e s and f o r t h e sums s e t o u t i n t h e
p a r t i c u l a r s h e r e u n d e r .
PARTICULARS
Mortgage N o .
659976
739002
D a t e R e g i s t e r e d Amount S e c u r e d
F e b r u a r y 27, 1 9 9 1 $125,000.00
December 1 7 , 1 9 9 2 53,000.00
F e b r u a r y 11, 1994 900,000.00
836428 November 3, 1994 750,000.00
9 1 0 2 3 1 September 3, 1 9 9 6 2,200,000.00
?The p l a i n t - i f f was i n d u c e d t o e x e c u t e t h e documents . .
ment ioned i n p a r a g r a p h s 3 and 4 h e r e o f by t h e
undue i n f l u e n c e o f t h e f i r s t d e f e n d a n t and unde r
h i s d i r e c t i o n and p u r s u a n t t o t h e f a i t h , t r u s t
and c o n f i d e n c e s h e r e p o s e d i n him a s h e r husband,
b u t w i t h o u t any s e p a r a t e o r i n d e p e n d e n t a d v i c e
and w i t h o u t d u e c o n s i d e r a t i o n o f t h e r e a s o n s f o r
o r t h e e f f e c t o f what s h e was d o i n g .
PARTICULARS
( i The f i r s t d e f e n d a n t knew t h a t t h e p l a i n t i f f
d i d n o t u n d e r s t a n d t h e n a t u r e and consequence
o f t h e documents s h e was a s k e d t o s i g n .
(ii) The second d e f e n d a n t i n an a t t e m p t t o f u r t h e r
r e d u c e t h e c a p a c i t y o f t h e p l a i n t i f f t o
u n d e r s t a n d t h e n a t u r e o f t h e documents s h e
was be ing asked t o s i g n , caused t h e
p l a i n t i f i f t o s i g n many o f t h e
documents i n "blank" and a f t e r he
had r e c e i v e d t he . l o a n amounts.
(iii) The f i r s t d e f e n d a n t , husband o f t h e
p l a i n t i f f took d e l i b e r a t e advan t age
o f h i s p o s i t i o n o f t r u s t and f a i l e d
. T t o e n s u r e t h a t t h e p l a i n t i f f sough t
. - -
independen t a d v i c e i n r e l a t i o n t o t h e
documents t h e p l a i n t i f f was asked t o
s i g n .
The second de f endan t had a c t u a l o r c o n s t r u c t i v e
n o t i c e o f t h e f a c t t h a t t h e f i r s t de f endan t was
exercising undue i n f l u e n c e over h e r .
PARTICULARS
(i) Tha t t h e second de f endan t knew t h a t t h e
P l a i n t i f f had r e c e i v e d no l e a a l a d v i s e .
(ii) Tha t t h e second de f endan t f a i l e d t o e n s u r e
t h a t - t h e p l a i n t i f f took independen t l e g a l
a d v i c e .
(iii) A l t e r n a t i v e l y , t h a t t h e second d e f e n d a n t
f a i l e d t o emphasize and communicate w i t h
t h e p l a i n t i f f t h e need t o s eek independen t
l e g i l adv i ce .
That t h e second d e f e n d a n t - f a i l e d t o in form
t h e p l a i n t i f f of t h e f u l l e x t e n t o f t h e
f i r s t d e f e n d a n t ' s l i a b i l i t y t o t h e second
defendan t when she was r e q u e s t e d t o e x e c u t e
t h e mortgages , g u a r a n t e e and s e c u r i t y
documents.
I n t h e p remises , t h e s a i d In s t rumen t o f Guarantee
and t h e Mortgages ove r t h e p r o p e r t y known a s Lot
45 Unity H a l l , Montego Bay i n t h e p a r i s h o f S a i n t
James r e g i s t e r e d a t Volume 1183 F o l i o 480 were o r
have become n u l l and vo id and a r e ~ n e n f o ~ c e a b l e .
AND THE PLAINTIFF CLAIMS:-
A d e c l a r a t i o n t h a t t h e p l a i n t i f f was
wrongfu l ly induced t o s i g n and e x e c u t e
an i n s t rumen t of Guarantee d a t e d t h e
14 th day o f October , 1 9 9 4 .and
In s t rumen t s f o Mortgage numbered
656976, 739002, 796508, 836428 and
910231 ove r p rope r ty known a s Lot
4 5 Unity Hall, Montego Bay in the-
parish of Saint James registered
at Volume 1183 olio-480 of the . .
Register Book of Titles in favour
of the second defendant by the undue
influence of the first defendant and
that the said Instrument of Guarantee
and Instruments of Mortgage are null
and void. . -
2. An Order that the defendants do execute
all such documents and do all and such
other as may be necessary to discharge
the said mortgages and revoke the
Instrument of Guarantee.
An injunction to restrain the second
defendant whether by itself, its
servants and/or agents or howsoever
from transferring or in any way
dealing with the said property.
4. Any further or other relief as this
Honourable Court deems just.
Costs.
I t appea r s t h a t t h i s a c t i o n was f i l e d a s a r e s u l t of
an a c t i o n f i l e d by t h e second de fendan t , Bank of Nova S c o t i a
Jamaica L imi ted , a g a i n s t t h e f i r s t de f endan t P a t r i c k Rose-Green
and h i s w i f e , t h e p l a i n t i f f S h e i l a Rose-Green, on t h e 1 3 t h o f
August , 1998, s 'eeking t o r e c o v e r from them t h e sum o f $28,561,686.17
a s monies loaned t o them t o g e t h e r w i t h i n t e r e s t a s a t 30 th J u l y ,
1998. (See S u i t No. C .L . B240/98).
Fol lowing upon t h i s a c t i o n be ing f i l e d , t h e second
d e f e n d a n t , _ ~ a n k o f Nova S c o t i a Jamaica Limited i s s u e d a summons
on t h e 9 t h o f ~ e c e m b e r , 1998, app ly ing f o r an o r d e r t h a t
1. The p l a i n t i f f ' s a c t i o n be s t r u c k o u t
and t h e w r i t o f summons and a l l
subsequen t p roceed ings f i l e d h e r e i n
s e t a s i d e a s a g a i n s t t h e second
d e f e n d a n t on t h e ground t h a t
( a ) it d i s c l o s e s no cause of
a c t i o n a g a i n s t t h e second
de fendan t and /o r
( b ) it i s f r i v o l o u s and v e x a t i o u s
and/'or an abuse of t h e p roces s
o f t h e Cour t .
2 . The c o s t s o f t h i s a p p l i c a t i o n and of t h e
a c t i o n t o d a t e he reof be t h e second
d e f e n d a n t ' s and be t a x a b l e immediately.
I t i s t h e d e t e r m i n a t i o n of t h i s summons by t h e second
de fendan t t h a t I am now engaged.
M r s . M i n o t t - P h i l l i p s t e n d e r e d . a . d o c u m e n t c o n t a i n e d - ~
i n t e n pages t h e second d e f e n d a n t " s , . u b ~ n i s s i o n i n s u p p o r t cC t h e
summons which i s a t t a c h e d .
I n r e s p o n s e t h e p l a i n t i f f th rough h e r A t t o r n e y , informed
t h e C o u r t t h a t s h e was n o t r e l y i n g on t h e d o c t r i n e o f non - es t
f a c t u m i n t h i s summons. M r . Graham s u b m i t t e d t h a t t h e q u e s t i o n f - \ L/' whether a n a c t i o n o u g h t t o b e s t r u c k o u t i s a m a t t e r o f h e s c r e t i o n .
H e r e f e r r e d t o t h e . - White Book page 328, r u l e 1 8 / 1 9 / 3 . E x e r c i s e
o f t h i s ' d e s c r e t i o n i s used s p a r i n g l y and o n l y i n c l e a r and -- : 1
obvious c a s e s . Counsel f o r t h e p l a i n t i f f a l s o ;e fer red t o t h e
S u i t C.L.B240/98 Bank of Nova S c o t i a Jamaica L imi ted a g a i n s t
P a t r i c k and S h e i l a Rose-Green.
I n view o f t h i s c l a i m a g a i n s t t h e p l a i n t i f f a s a
g u a r a n t o r of h e r husband's i n d e b t e d n e s s which was u n l i m i t e d i n
t i m e o r amount which wns now a t $28.5M, t h i s was a s i t u a t i o n
where a w i f e would need an independen t l e g a l a d v i c e . R e Undue
I n f l u e n c e , M r . Graham r e y a r d e i t h e s e c e n a d e c e n d n n t ' s
submiss ion on t h i s p o i n t a s e r r o n e o u s and r e f e r r e d t o t h e
p l a i n t i f f ' s a f f i d a v i t f i l e d on t h e 22nd o f Oc tober , 1998, a t
p a r a g r a p h 8 . He s u b m i t t e d t h a t t h e documents e x e c u t e d a t t h e
bank were t o h e r m a n i f e s t d i s a d v a n t a g e . She had been m a r r i e d
t o t h e f i r s t de fen ,dan t f o r o v e r twenty y e a r s . There s h o u l d
be a n a j u d i c a t i o n i n t h i s c a s e a f t e r a t r i a l .
Counsel r e a d t h e p l a i n t i f f ' s a f f i d a v i t d a t e d 9 t h of
A p r i l , 1999. The e x h i b i t S.R.G. I1 a t t a c h e d c l e a r l y i n d i c a t e d
t h a t t h e p l a i n t i f f had been w r i t i n g t o t h e bank from 1996.
T h i s was l o n g b e f o r e a n y s u i t had been f i l e d . The p l a i n t i f f w a s
a g u a r a n t o r o f t h e l o a n t o h e r husband, t h e f i r s t d e f e n d a n t , a n d
n o t a co-borrower d e s p i t e b e i n g d e s c r i b e d as c o - a p p l i c a n t i n t h e
a p p l i c a t i o n form. I I
M r . Graham c o n t e n d s t h a t t h e q u e s t i o n o f e d u c a t i o n i s i
b u t one o f t h e c o n s i d e r a t i o n which a t r i b u n a l was t o t a k e i n t o I (- a c c o u n t i n d e c i d i n g w h e t h e r t h e w i l l o f t h e p e r s o n r e l y i n g on t h e
d o c t r i n e o f undue i n f l u e n c e h a d been s o a f f e c t e d . S e e Bank 1 E x t e r i o r I n t e r n a t i o n a l v s . Mann and o t h e r s , ' C 1 9 9 5 ) 1 AER p. 936.
- - - ,7111 t h e i n s t a n t c a s e t h e p l a i n t i f f was n o t i n v i t e d b y t h e
bank t o s e e k l e g a l a d v i c e - H e s u b m i t t e d t h a t a l l o f t h e d e c i d e d
c a s e s s t a t e t h a t where t h e r e i s t h e p o s s i b i l i t y where one p a r t y
i s d e f e n d a n t a g a i n s t t h e o t h e r , t h e n t h e l e n d i n g i n s t i t u t i o n i s I p u t on n o t i c e - it mus t a d v i s e t h e w i f e t o s e e k i n d e p e n d e n t 1 l e g a l a d v i c e .
Re -Def i c i ency i n p l e a d i n q s
M r . Graham s u b m i t t e d t h a t t h e o n l y t h i n g a p e r s o n r e l y i n g
on undue i n f l u e n c e t o do i s t o p l e a d t h e f a c t s which yl.veu r ise t o
t h e e q u i t y e i t h e r by m i s r e p r e s e n t a t i o n o r undue i n f l u e n c e . It
i s t h e n f o r t h e d e f e n d a n t i n r e s p o n s e t o t h e f a c t s b e i n g p l e a d e d ,
t o p l e a d and p rove t h a t h e i s a bona f i d e p u r c h a s e r f o r v a l u e
w i t h o u t n o t i c e . S e e B a r c l e y s Bank v s . B o u l t e r & Anothe r (19931_
2 AER. p. 1002;
Royal Bank o f S c o t l a n d v s . E t r i d q e - (1997) 3 AER. p. 628;
Avon F i n a n c e Co. l t d . vs . Br , idge (1985) ; 2 A E K . p . 281'.
F r i v o l o u s , Vexa t ious - Abuse o f P r o c e s s o f Cour t .
See Meadinqs, P r i n c i p l e s & P r a c t i c e by S i r J a c k J a c o b , a t page 2 2 2 .
Supreme C o u r t P r a c t i c e (1997) Volume 1 p a r t 1 - page 3 3 4 .
Hemington v s . S c a l e s (1897) 2 ch . 1.
M r . Graham s u b m i t t e d t h a t though a C o u r t w i l l not:on
a f f i d a v i t e v i d e n c e , o r d e r a p l e a d i n g t o be s t r u c k o u t on t h e
ground t h a t t h e s t a t e m e n t s a r e f a l s e , " t h e c i r c u m s t a n c e s i n t h e dl.,
p r e s e n t c a s e showed t h e d e f e n c e t o be f r i v o l o u s , and v e x a t i o u s ,
and one which ough t t o b e s t r u c k o u t a s b e i n g an a b u s e o f t h e
p r o c e d u r e o f t h e C o u r t " .
Counsel f u r t h e r s u b m i t t e d t h a t i n a l l i n t e r l o c u t o r y
a p p l i c a t i o n s t h e t r i b u n a l s h o u l d be wary o f a t t e m p t i n g t o come
t o f i n d i n g s of f a c t b a s e d on competing a f f i d a v i t s s i n c e choos ing
between them was t h e f u n c t i o n . o f t h e t r i a l judge , n o t t h e judge
i.n t h e i n t e r l o c u t o r y a p p l i c a t i o n - See Day v s . RAC Motorinq
S e r v i c e s L td . - (1999) 1 AER. page 1007.
L ino type H a l l v . Baker (1992) 4 AER p . 887.
Counsel s u b n i t t e d t h e c i r c u m s t a n c e s o f t h e p l a i n t i f f :
She deponed t o t h e f a c t t h a t s h e reposed g r e a t t r u s t and c o n f i d e n c e
i n h e r husband - She was a mere c h i l d when s h e g o t m a r r i e d . Her
husband was a man o f some prominence and s u b s t a n c e - s h e was
a n a c c o u n t i n g c l e r k and t h e n became an i n s u r a n c e a g e n t . Undue
i n f l u e n c e was e x e r c i s e d o v e r h e r by him and t h i s a f f e c t e d h e r
1 . I t was n o t h e r w i l l . The bank had a n o b l i g a t i o n t o
w r i t e h e r t o p r o c u r e independen t a d v i c e . There i s no d i s p u t e
, that they did no such thing. -In the context of all those
circumstances the Court should dismiss the second defendant's
claim and strike out the summons.
Mrs. Minott-Phillips on behalf of the second defendant
submitted her reply on the law in writing covering three pages
which are attached.
Nr. Graham in reference to new matters raised by the
second defendant submitted that-the question as to which category,
whether actualor.presumed undue influence cannot arise until
after the trial.
In Etridge No. 2, the primary obligation was for the
Court to lay down in a comprehensive way what it is that a bank
must do in order to discharge its duty to satisfy itself that
Ct an individual who contend that he or she had been affected by
~ I I U U ~ : infiuence that that affect does not fix the bank with
notice.
In Etridye No. 1 this dealt with the question of good
defence. An application to strike out the writ would not
accord with principles of law and practise. This would be
driving away the plaintiff from the judgment seat before having
heard from her.
This was an end to the submissions.
Conclusion
The central issue arising from this summons is whether
there was any duty on either the first or second defendants to
ensure that the plaintiff obtained independent legal advice when
she signed and executed the following:-
(i) Instrument of Guarantee on the 14th of
October 1994, for her husband's indebtedness
to the second defendant for unlimited sums; .- -
(ii) A number of Mortgage Deeds securing sums
totalling $4,553,000 from the second defendant
over .the period October 1992 to October 1995;
(iii) Promissory Notes totalling $9,910,079.40
due from both herself and her husband in
favour of the second defendant over the
period August, 1993 to September 1995;
(iv) Guaranteeing loan of $3,200,000. made to
the first defendant done on the 17th of
November, 1994, to settle indebtedness
already incurred by the plaintiff and
her husband jointly for improvement
of their home;
(v) Guaranteeing Scotia Plan Loans
totalling $4,969,473. 82 made to
the first defendant by the second
defendant.
The p l a i n t i f f i s no longer r e l y i n g on t h e d o c t r i n e of
non e s t factum a s a defence. I t a k e it t h e r e f o r e t h a t she i s
admi t t i ng t h a t she was a p a r t y t o t h e t r a n s a c t i o n s mentioned I
above. She c la ims however, t h a t t h e p a r t p layed by h e r was I
because of t h e under i n f l u e n c e of he r husband, t h e f i r s t defendant . 1 I I - But how does t h i s i nvo lve t h e second d e f e n d a n t , t h e Bank o f Nova
C S c o t i a Jamaica Limited. She c la ims tha.t t h e Bank owes h e r a 1 l e g a l du ty t o a d v i s e he r t o s eek independent l e g a l adv ice be fo re 1 s ign ing t h e s e documents, and because of i t s f a i l u r e t o do s o , I
she s igned t h e documents w i t h o u t l e g a l advice -and t h e r e f o r e ,
i s n o t be l i a b l e t o t h e Bank under t h e guaran tee t h a t she gave.
The second defendant conten&however, t h a t t h e Bank- 1
had n e i t h e r a c t u a l nor c o n s t r u c t i v e n o t i c e of t h e undue i n f l u e n c e 1 I
and that i n any e v e n t , t h e loan t r a n s a c t i o n s were n o t t o t h e
mani fes t d i sadvantage of t h e p l a i n t i f f and t h a t i n f a c t she
bene f i t t ed from t h e l o a n s .
Counsel f o r t h e Bank r e f e r r e d t o t h e d e c i s i o n of t h e
House of Lordsin C . I . B . C . Mortgages p i c v s . P i t t (1993) 4 AER
page 433 where Lord Browne - Wilkinson . . s a i d a t page 4 4 1 .
" I f t h i r d p a r t i e s were t o be f i x e d wi th c o n s t r u c t i v e n o t i c e of undue i n f l u e n c e i n r e l a t i o n t o every t r a n s a c t i o n between a husband and a w i f e , such t r a n s a c t i o n s would become a lmos t imposs ib le . On every purchase o f a home i n j o i n t names, t h e b u i l d i n g s o c i e t y o r bank f inanc ing t h e purchase would have t o i n s i s t o n meeting t h e w i f e s e p a r a t e l y from he r husband, a d v i s e h e r a s t o t h e n a t u r e of t h e t r a n s a c t i o n and recommend h e r t o t a k e l e g a l adv ice s e p a r a t e from t h a t of he r husband. I f t h a t
;were n o t done , t h e f i n a n c i a l i n s t i t u t i o n would have t o r u n t h e r i s k o f a s u b s e q u e n t a t t e m p t by t h e w i f e o r a v o i d h e r l i a b i l i t i e s under t h e ..
mortgage on t h e g rounds o f undue i n f l u e n c e o r m i s r e p r e s e n t a t i o n . To e s t a b l i s h t h e law i n t h a t s e n s e would n o t b e n e f i t t h e a v e r a g e m a r r i e d c o u p l e and would d i s c o u r a g e f i n a n c i a l i n s t i t u t i o n s from making t h e advance . "
Where t h e p l a i n t i f f i s i n t h e p o s i t i o n o f b e i n g a s u r e t y
o n l y f o r a l o a n made o n l y t o h e r husband, t h e n a p resumpt ion may --
a r i s e t h a t t h e Bank had c o n s t r u c t i v e n o t i c e o f t h e h u s b a n d ' s
undue i n f l u e n c e . S e e B a r c l a y s Bank p l c v s . O ' B r i e n (1993) 4 AER
p a g e 417.
3n the o t h e r hand, where t h e l o a n i s made t o t h e
husband and t h e w i f e j o i n t l y , it c a n n o t b e s a i d t h a t t h e t r a n s a c t i o n
was m a n i f e s t l y d i sadvan . t ageous t o her . .
"A c l a i m t o s e t a s i d e a t r a n s a c t i o n on t h e ground o f under i n f l u e n c e whe the r presumed o r a c t u a l c a n n o t s u c c e e d u n l e s s t h e c l a i m a n t p r o v e s t h a t t h e impugned t r a n s a c t i o n
was m a n i f e s t l y d i s - a d v a n t a g e o u s t o him." ( S e e P i t t ( s u p r a ) a t
p a g e 4 3 8 ) .
I n c l e a r and u n c h a l l e n g e d a f f i d a v i t e v i d e n c e t h e p l a i n t i f f
p e r s o n a l l y b e n e f i t t e d from s e v e r a l o f t h e t r a n s a c t i o r s e n t e r e d w i t h
t h e Bank a l o n g w i t h h e r husband. They were a l l made f o r t h e
imgrovement o f t h e i r m a t r i m o n i a l home.
Save f o r S c o t i a P l an l o a r s t o t a l l i n g j u s t under $5 m i l l i o n
made t o t h e husband p e r s o n a l l y I f i n d t h a t t h e bank was under no
du ty t o ensu re t h a t t h e w i f e had independent l e g a l adv i ce .
There w i l l t h e r e f o r e be an o r d e r i n t e rms o f t h e second
d e f e n d a n t ' s summons d a t e d 9 t h December, 1-998, pa ragraph 1 ( a ) and
paragraph 2 a s amended.